Global Monetary Conditions Monitor: The drop in oil prices is all about monetary policy

We have published the June edition of Global Monetary Condition Monitorour monthly flagship publication, which covers monetary policy in 26 countries around the world and gives an overview of global monetary matters and market implications of global monetary trends.

Here are some of the key takeaways from the Monitor:

Oil prices are close to their lowest levels of the year and have dropped significantly since March.

Contrary to popular perceptions, this is not primarily a supply-side phenomenon, but rather about monetary factors. The tightening of monetary conditions in the US since March is the main reason that oil prices have fallen.

Also in this edition of Global Monetary Conditions Monitor, we zoom in on the Bank of England and why it is less urgent to increase UK interest rates than three months ago. While the hawks are right that some tightening is warranted in the medium term, there is no reason for a panic hike now.

Finally, we take a closer look at the renewed debate about the proper policy target for the US Federal Reserve. We argue that this discussion could have large market implications, particularly if the Fed were to adopt a nominal GDP target.

The price for a single 12-months subscription to Global Monetary Conditions Monitor is EUR 2,000 (EUR 1,000 for academic institutions and think tanks).

Make sure to visit our Research Shop where you can subscribe to Global Monetary Conditions Monitor or download some sample pages from this month’s Monitor as well as ask questions about our research here.